Asset allocation reflects risk appetite

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Despite ongoing volatility, investors continue to remain overweight on equities and increasingly positive on commodities and real estate, while government bonds continue to be out of favour, according to the October Asset Allocator Consensus released by Netherlands-based Alpha Research.

While European equity markets have been particularly hard-hit, investors exposure remained relatively stagnant, with 54.3% of respondents remaining overweight.

The report also highlights that while the overall assessment of equities remains almost stable, the last month has seen significant changes in sector allocation information technology gained further in popularity, from 69.2% to 86.7%, while utilities and consumer staples have fallen out of favour with 73% of respondents going underweight.

Meanwhile, investors continue to be bull on the offensive sector, with financials, industrials and technology being assessed positively or neutral by all respondents.

In the fixed income segment, high yield remains the most popular investment with 53.5% of investors positive, reflecting a 7% increase compared to the previous month. Government bonds continue to fall out of favour, with 85.4% of respondents going underweight, reflecting an ongoing willingness to take risks in order to achieve returns.

The October report is based on asset allocation research provided by 50 asset managers and sector research by 15 asset managers.

The full report can be accessed here.

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